Quote:
Originally Posted by MasterG
Now that the competition is real, I am surprised that dominant player in the picture (i.e. existing taxi companies) haven't started to innovate.
Regulate the safety and liability elements, but allow all the technological and payment innovation of Uber. Why is this difficult?
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It's quite a bit harder than it seems at first glance. The biggest difference between Uber and traditional taxi companies is that Uber is a technology company first, and a ride dispatcher second. The technology is built around ride dispatching.
Traditional taxi companies are simply ride dispatchers, and the companies are based around doing that as cheaply as possible, hence, a lack of technology.
Someone like Uber is well set up to innovate, because their entire business model relies on technology. They have software engineers on staff developing proprietary technology for years.
Taxi companies have guys answering phones and routing cabs to different locations. There is some technology, but they aren't set up to spearhead giant new software systems to integrate with their existing workflows.
The taxi industry faces an existential crisis, but they don't have the expertise to really do what Uber does. The drivers aren't technology people, and the dispatchers don't have the resources either.
Once your business model is set up to hire a certain set of people with certain skills, it is very hard to flip that on it's side and use all your operating income to hire a completely different set of workers to do a completely different job. In reality, you'd need quite a bit more capital than operating income, which means incredibly risky loans to basically bet your whole enterprise on shifting into a technology company that, even if they start now, is already several years behind Uber.
The entire thing is a great case study in why technology companies like Amazon and Uber can so easily disrupt traditional brick and mortar retail companies. By starting their entire company from technology first, they turn the entire industry on it's head, the impact strikes like a meteor, and the dinosaurs become extinct.